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Efficient Patent Pools

Josh Lerner and Jean Tirole

No 9175, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper builds a tractable model of a patent pool, an agreement among patent owners to license a set of their patents to one another or to third parties. It first provides a necessary and suñcient condition for a patent pool to enhance welfare. It shows that requiring pool members to be able to independently license patents matters if and only if the pool is otherwise welfare reducing, a property that allows the antitrust authorities to use this requirement to screen out unattractive pools. The paper then undertakes a number of extensions. It evaluates the external test' according to which patents with substitutes should not be included in a pool; analyzes the welfare implications of the reduction in the members' incentives to invent around or challenge the validity of each other's patents; looks at the rationale for the (common) provision of automatic assignment of future related patents to the pool; and, last, studies the intellectual property owners' incentives to form a pool or to cross-license when they themselves are users of the patents in the pool.

JEL-codes: K11 L41 (search for similar items in EconPapers)
Date: 2002-09
Note: CF PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Lerner, Josh and Jean Tirole. "Efficient Patent Pools," American Economic Review, 2004, v94(3,Jun), 691-711.

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Journal Article: Efficient Patent Pools (2004) Downloads
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